The European Union (EU) has stepped up its financial assistance to Sri Lanka with an €8 million (LKR 2.8 billion) grant to support biodiversity conservation and solid waste management, a move that underscores Brussels’ dual approach of providing aid while closely monitoring the island nation’s adherence to governance and human rights standards.
The latest grant, signed this week with the Ministry of Finance, is part of the EU’s Global Gateway Strategy. It aims to restore degraded ecosystems, promote sustainable land-use practices, and strengthen solid waste management to protect both public health and biodiversity.
“Biodiversity is one of the most important assets of Sri Lanka, and through this project we will work together with the authorities to strengthen its protection by improving management of waste,” EU Ambassador Carmen Moreno said.
The initiative will be implemented by the Ministry of Public Administration, Provincial Councils and Local Government, and the Ministry of Environment, in collaboration with the EU. Beyond environmental protection, the program is intended to contribute to Sri Lanka’s sustainable economic recovery, linking green transition with long-term policy reforms.
While financial grants provide immediate relief, Sri Lanka’s long-term economic prospects hinge on the renewal of the EU GSP+ (Generalized Scheme of Preferences Plus) facility, which allows duty-free access for over 6,000 products to European markets. The scheme has been a vital lifeline, especially for the apparel industry, which accounts for nearly 40% of export earnings.
Sri Lanka regained GSP+ in 2017 after pledging to uphold 27 international conventions on human rights, labor standards, environmental protection, and good governance. However, EU officials have repeatedly signaled that compliance will be scrutinized before a decision on continuation is made. The facility is due for review in 2026, but early signals matter for investor and exporter confidence.
Civil society groups and trade unions in Brussels have raised concerns over press freedom, labor rights, and governance issues in Sri Lanka. Analysts point out that the EU uses aid flows like the current biodiversity grant not only to support recovery but also as a political lever to encourage reforms.
The government has publicly committed to maintaining compliance with EU conventions, but implementation remains uneven. Any slippage risks putting billions of dollars in exports at stake. Apparel sector leaders warn that the loss of GSP+ could cost Sri Lanka an estimated €500 million annually in lost market access.
Diplomatic sources indicate that Brussels is closely watching how Colombo handles governance reforms tied to the IMF bailout program, environmental commitments under climate accords, and labor rights in export industries.
The latest EU grant signals goodwill and continued engagement, but analysts caution it should not be mistaken for a guarantee of future trade preferences. Aid may smooth relations, but the GSP+ renewal will ultimately depend on Sri Lanka’s track record, not promises.
For now, the €8 million biodiversity and waste management initiative reflects both an opportunity and a warning: Europe is ready to invest in Sri Lanka’s green recovery, but expects accountability and reform in return.
